Stocks

Future Retail stake sale likely this month-end

Forum Gandhi Mumbai | Updated on June 17, 2020 Published on June 17, 2020

Kishore Biyani, Future Group CEO   -  PAUL NORONHA

Biyani in talks with RIL, Samara Cap, Amazon, among others

Kishore Biyani’s Future Retail Ltd is likely to seal a deal to sell a stake in the company by the end of this month. Sources close to the development said the financial position of the company is precarious and there cannot be any further delay in getting in a new investor.

“Biyani wants to ink the deal by the end of the month and talks are ongoing with multiple players. Each investor has brought a different proposal in terms of the equity stake they want, valuation, and taking on debt,” said a source.

Earlier media reports suggested that Reliance Industries Ltd, Premji Invests and Samara Capital, along with Amazon, were in the fray to pick up a stake.

According to sources, there is no one player ahead in the race at this point. If the deal is done with Reliance, Biyani is most likely to lose the majority stake as the Mukesh Ambani-led firm will want a majority stake. “Biyani seems to be more comfortable with Samara and Amazon because the latter is an existing investor. If the deal is struck with Samara and Amazon, then Biyani will get to keep some stake in the company he founded,” said a Mumbai-based banker.

An RIL spokesperson said: “As a policy, we do not comment on media speculation and rumours. Our company evaluates various opportunities on an ongoing basis.”

According to credit rating agency ICRA, the debt book of Future Group’s six listed firms increased to ₹12,778 crore as of September 2019 from ₹11,463 crore in March 2019. In May this year, Fitch Ratings assigned Future Retail a final Long-Term Issuer Default Rating of ‘CCC+’. According to the banker quoted above, the Future Group needs ₹6,000-8,000 crore to stay afloat.

A query sent to Future Retail remained unanswered. Amazon said it did not comment on speculation.

 

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Published on June 17, 2020
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